Bond Investors Walk on Wild Side

Michael Aneiro explains what you can gain - and lose - from "unconstrained" bond funds.

This transcript has been automatically generated and may not be 100% accurate.

I ... time for bond investors to get more creative and Jack Otter and her parents dot com on here is my can euro are Income Investing blogger for ... Barron's dot com and also the author of a cover story this week ... on the unconstrained bond funds he tells about these likes ... unconstrained bond funds come up in the last five years or so and you basically with different seasons in most bond funds will fall and next ... these donors and the idea behind that is that at a time when interest rates are getting close to historic lows as they were over the last couple of years ... people are afraid that if rates are going up as the date of the summer ... than anything has to close the index to say no ... the Treasury fund or something like that ... was going to lose money on bond funds to lose money over the summer so fun shops Kamal deity of unconstrained funds which ... didn't have to follow Penn stars ... didn't have to be in Treasury debt when that was losing money and to look elsewhere for income ... the one hand it sounds great in theory on the other ... in re DeVoe has been writing a newsletter for decades ... and warm few years back he wrote that more money had been lost reaching for yield and the point of a gun ... he's probably right these things sound like they could be dangerous ... that they're basically this new strategy has been to try to get ... avoid interest rate Mr voyeuristic did was lose money and all I'm Simon affixes rates go up and then move on to come out with better rates ... they expose investors to credit risk to visit ... to the two different types of risk that meets those two in bond funds ... so my dying down wonders for good by definition ... resting up the other one ... and the other thing we looked at in the story is that ... these funds can be completely different from one of the unconstrained as a category on me and so far is that describes funds ... that can describe other categories and because you not on a benchmark ... you can insert a fee for all from holding strategies sad to hear diversity argument here if I wanna ... about Warren about rising rates but I also wanna im not ... be too risky here could I own one of these on constrains maybe as an ... outlier ... four per se it should not mean that a core holding of a bond portfolio think or funds is to this that if you think rising interest rates are going to rise for the subject of today's ... youth and how quickly they will rise if that's a concern of yours ... his death with a low ... emission one funds the story ... sure we have ... more unwanted messages that Goldman Sachs Strategic Income fund that a ten billion dollar fund has returned about six percent over the past year ... which is pre much atop its category and to be sent to these funds ... of operating ... the prospect of its one one is that it's more ... of those middle of the road in terms of its strategy in its holdings ... I he recommended three more ... viewers can read the story to find out what they are